Mediawan joins big league in TV content with offer for Groupe AB

PARIS (Reuters) - Mediawan MDWP_p.PA, set up by some of France’s biggest media investors to challenge giants like Netflix, is set to become the country’s second biggest pay TV player through a proposed purchase of French TV and content specialist Groupe AB.

Pierre-Antoine Capton, CEO of Mediawan, poses during a ceremony for the debuts of Mediawan, a company set up to buy European media and entertainment businesses, on Euronext Paris stock market at La Defense business and financial district in Courbevoie near Paris, France, April 22, 2016. REUTERS/Jacky Naegelen

Mediawan has offered 270 million euros ($289 million) to buy the French broadcasting group, it said on Monday

French TV group TF1 (TFFP.PA) would sell its 33.5 percent stake in Groupe AB to Mediawan as part of the deal.

Mediawan, an acquisition vehicle, was listed on the Paris stock market last year. The company was set up by Pierre-Antoine Capton, founder of French media producer 3e Oeil Productions, and Xavier Niel and Matthieu Pigasse, co-owners of Le Monde newspaper and L’Obs magazine. Niel also controls and founded telecom group Iliad (ILD.PA). Pigasse leads the global M&A business of investment bank Lazard (LAZ.N).

“Our plan is a simple one. It’s to use Groupe AB, which will be renamed Mediawan, to create the leading European company in terms of content, and in terms of different areas such as production, catalogs and distribution,” Pigasse told Reuters.

The deal would make Mediawan the second biggest in pay TV in France with near 10 percent of audience share in 2015/2016, behind Vivendi’s Canal + which leads the pack with 36.7 percent, according to French audience measurement agency Mediametrie.

Groupe AB also has a lucrative TV rights business as part of its quad-play package that exclusively distributes popular series like Friends in Europe as well as Paramount films in France and Belgium.

CONTENT BIG BANG

“Distributors around the world are turning their attention to quality content assets, viewing content ownership as the ultimate hedge against an evolution in content distribution to which they are structurally exposed.”, said Groupe AB’s financial adviser on the deal Arnaud Dassy, a partner at Perella Weinberg.

Perella Weinburg advised AT&T (T.N) on its planned $85 billion Time Warner TWX.N acquisition announced last year, which would give the telecom company control of cable TV channels HBO and CNN, film studio Warner Bros and other media assets.

Dassy said such deals would help media groups gain access to consumer data held by telecom companies and use it to improve their content and earn more money from advertising.

Pigasse said Mediawan was in talks with other European media companies over potential deals, and that they hoped to recreate a “Big Bang” in the media sector similar to the wave of deals in London after the “Big Bang” deregulation of financial services of the late 1980s.

“We are already in talks with other European companies based outside France, at least five of them. We’re looking to launch the start of a major ‘Big Bang’ in the sector,” Pigasse said.

(This version of the story was refiled to add dropped letter in Groupe AB in headline)